The Commodity Futures Trading Commission recently filed a complaint against Jon Cornice, CEO of MFC Global, charging him with directing one of his mid-level managers, Edith O’Brien, to transfer millions of dollars of customer assets to cover a bank overdraft that threatened to sink the flam. If he did so, the former head of Goldman Cash, U. S. Senator, and governor of New Jersey broke the law.
However, Corrine’s lawyer claims his client Is not guilty as charged because “It never dawned on” him that when he, the boss, approached his subordinate with a subtle request to find” $175 million that that call would cause her to “violate the golden rule” of protecting customer assets. Cornice faced a dilemma: his bold efforts to transform MFC Global-?”a plain vanilla commodities a full-blown investment bank la Goldman, would collapse if it didn’t quickly deal with overdrawn accounts at Comparing Chase, the firm’s principle bank, which was threatening to stop doing business with MFC Global.
Moreover, Corrine’s lawyer says that Cornice “never directed Ms. O’Brien or anyone else regarding which account should be used to cure he overdrafts, and he never directed that customer funds should be used for that purpose. Nor was he informed that customer funds had been used for that purpose. ” O’Brien, a life-long middle manager, does not dispute the fact that Cornice never explicitly ordered her to take the funds from customer accounts.
